The Series A is the first institutional stage of venture capital funding. It marks a significant transition: the company is no longer focused on validation (which was the goal of the Seed Round) but is now focused entirely on scaling its validated business model.
If the Seed Round proved that people need the product, the Series A proves that the company can turn that product into a massive, scalable business.
Key Requirements for Series A Institutional VC firms invest here based on measurable traction. They are looking for clear evidence of Product-Market Fit (PMF):
- Revenue: A repeatable revenue stream, often around £1 million ARR (Annual Recurring Revenue).
- Unit Economics: A proven LTV:CAC ratio of at least 3:1.
- Team: A full leadership team (not just the founders) that can execute the scale plan.
The Deal Structure
- Size: Varies heavily, but typically falls between £3 million and £15 million (and often higher globally).
- Source: Led by dedicated, institutional Venture Capital (VC) firms.
- Terms: This is a highly structured, "priced" round where a formal valuation is set. The Term Sheet will include common clauses like Liquidation Preferences and mandatory Board of Directors seats for the lead investor.
Key Takeaway: Series A is money for execution. You need to prove you have a reliable engine; the investment is the fuel to take that engine from zero to 60 as fast as possible.
